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TMI Blog2021 (3) TMI 489X X X X Extracts X X X X X X X X Extracts X X X X ..... reopened now in the original assessment order; while examining the intangible assets, the assessing officer, has examined the issue of non-compete fee alone which was taken into consideration in the order as well while the other components had been overlooked. Hence it cannot be said that an opinion has been formed in this regard which may amount to change of opinion. Therefore, the case laws quoted by the assessee are neither relevant nor applicable in this when there is no discussion on the issue in the assessment order and no details were called for by the Assessing Officer or filed by the assessee on the issue, no finding either positive or negative was arrived at during the course of the original assessment proceedings. Hence there is no question of change of opinion. This point of view is ascertained by the decisions in the following cases - A.L.A. Firms Vs. CIT (Mad) 102 ITR 622, Ess Kay Engineering Co. (P.) Ltd. Vs.CIT (SC) 247 ITR 818, Revathy C.P. Equipments Ltd. Vs. DCIT & Ors. (Mad) 241 ITR 856, and EMA India Ltd. Vs. ACIT (All) 30 DTR 82. In the case of Asst. CIT v. Rajesh Jhaveri Stock Brokers (P) Ltd. [2007] 291 ITR 500/161 Taxman 316 (SC), the Apex Court observed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut did not do so, it is the duty of the assessee to bring it to the notice of the assessing authority. The assessee knows all the material and relevant facts, the assessing authority might not. In respect of the material failure, the omission to disclose may be deliberate or inadvertent. That was immaterial. But if there is omission to disclose material facts, then subject to the other conditions, jurisdiction to reopen is attracted. If there are some primary facts from which reasonable belief could be formed that there was some nondisclosure or failure to disclose fully and truly all material facts, the ITO has jurisdiction to reopen the assessment. In the instant case, the officer has applied mind and has recorded the opinion with the belief that there lies an income that has escaped the assessment. The mere fact that the same could have been pointed out by the Audit Party may not make the Assessing Officer to entertain the due jurisdiction and power/duty vested upon him by the IT Act. It was also held by the Hon'ble Supreme Court in various judicial forums, few of which are quoted below: 1. CIT vs. P.V.S.Beedies (P) Ltd. /237 ITR 13. 2. Assistant Commissioner of Income-t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said Doosan International India Private Limited. 6. It is submitted that the second respondent issued notice dated 31.03.2016 under Section 148 of the Income Tax Act, 1961 for reopening the assessment of the Assessment Year 2009-2010 in the name of Doosan International India Private Limited, a defunct company, which has culminated in impugned order dated 25.10.2016 in the name of the aforesaid company. It is noticed that the notice dated 31.03.2016 was issued under Section 148 of the Income Tax Act, 1961. 7. The petitioner sent a letter to the first respondent asking the reasons for reopening the assessment. The first respondent gave its reasons for reopening the assessment proceedings vide communication dated 29.04.2016. In response to the same, the petitioner also filed its objection dated 01.06.2016. The first respondent thereafter passed the impugned order dated 25.10.2016 and rejected the objection filed by the petitioner. Aggrieved by the same, this Writ Petition has been filed by the petitioner. 8. In this writ petition, the petitioner has challenged the invocation of Section 148 of the Income Tax Act, 1961 for the purpose of re-opening the assessment and for passing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... od dissolved without being merged in terms of the order dated 17.02.2021 of the Karnataka High Court in C.P.No.201 of 2011. However, no intimation was given about the same by the petitioner until 08.08.2013. Thus, the jurisdictional officer, within whose jurisdiction the said transfer company, namely Doosan International India Private Limited, was registered, passed an order of assessment on 01.03.2013 in the name of the said company with the PAN No. of the said company. It was argued that the Assessing Officer disallowed only the depreciation claimed on account of the non-compete fees which implied the depreciation claimed under the other head was considered and allowed in the light of the fact that a proper explanation was given for the same. 13. It is submitted that in the reasoning given in the reopening assessment vide communication dated 29.04.2016, the Joint Commissioner of Income Tax (OSD) has merely stated that the said company had acquired the business of M/s.Ingersoll Rand (India) Limited for a consideration of Rs. 1,031 millions in November, 2007 and thus, from 2008-2009 (relevant previous year 2007-2008), the said company has claimed and allowed the depreciation on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome-tax, (2001) 247 ITR 436 (Allahabad) : (2001) 119 Taxman 61 (Allahabad). v. Commissioner of Income-tax, Delhi Vs. Kelvinator of India Ltd., (2010) 320 ITR 561 (SC) : (2010) 187 Taxman 312 (SC). vi. Commissioner of Income Tax Vs. Kelvinator of India Ltd., (2002) 256 ITR 1 (Delhi) : (2002) 123 Taxman 433 (Delhi). vii.PVP Ventures Ltd. Vs. Assistant Commissioner of Income-tax, Corporate Circle 5(2), Chennai, (2016) 65 taxmann.com 221 (Madras). viii.Karti P.Chidambaram Vs. Assistant Commissioner of Income-tax, Chennai, (2018) 402 ITR 488 (Madras) : (2017) 88 taxmann.com 27 (Madras). ix. Income Tax Officer, Ward No.16 (2) Vs. TechSpan India (P.) Ltd., (2018) 404 ITR 10 (SC) : (2018) 92 taxmann.com 361 (SC). x. Asianet Star Communications (P.) Ltd. Vs. Assistant Commissioner of Income-tax, Non-Corporate Circle 20(1), (2020) 422 ITR 47 (Madras) : (2019) 106 taxmann.com 293 (Madras). xi. Commissioner of Income-tax, Chennai Vs. Schwing Stetter India (P.) Ltd., (2015) 378 ITR 380 (Madras) : (2015) 61 taxmann.com 19 (Madras). xii.Commissioner of Income-tax - VI, New Delhi Vs. Usha International Ltd., (2012) 21 taxmann.com 454 (Delhi). Non existent Company:- i. C.I.T. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rejected. It is further submitted that the petitioner had wrongly claimed the depreciation on four items during the Assessment Year, i.e 2008-2009. The Original Authority had denied the depreciation on non-compete fees. She further submits that each of the other Assessment Year is different and there is no estoppels under law against the reopening the assessment. 22. The learned senior standing counsel for the respondents further submits that the transferred company which got merged with the petitioner has made internal allocation of the assets without any valuation and has wrongly claimed depreciation on the value allocated for the Customer / Vendor and Dealer list. She further submitted that the claim for depreciation under the heads of Customer / Vendor and Dealer list goes to the very root and it would be require a proper determination as to whether there is intangible asset on such Customer / Vendor and Dealer list. She places reliance on the decision of the Hon'ble Supreme Court in Girilal & Co. Vs. Income-tax Officer, Mumbai, (2016) 9 SCC 510 : (2016) SCC OnLine SC 1035, wherein, it has held as follows:- 3. It is clear from the above that this information was supplied as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Though the assessee company Doosan International India Private Limited stood merged/amalgamated with the petitioner company, no information was given about the merger to the jurisdictional Income Tax Officer or the Asst. Commissioner of Income Tax at Bangalore by the petitioner. 29. In the assessment proceeding, the petitioner replied to the notice issued under Section 142(1) of the Income Tax Act, 1961 in the name of Doosan International India Private Limited though on its letter head. The petitioner participated in the proceedings before the jurisdictional Asst. Commissioner of Income Tax, Bangalore and made submissions on 21.09.2012 and on 07.01.2013 without any demur. 30. Thus, the assessment order dated 01.03.2013 also came to be passed in the name of the said Doosan International India Private Limited even the said company ceased to exist and stood merged/amalgamated with the petitioner. 31. If the petitioner felt that the assessment order was made in the wrong name of the merged transferred company which had ceased to exist, it should have filed a suitable application for rectification of mistake before the Asst Commissioner of Income Tax Bangalore for effecting the nam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e aforesaid Section of the Income Tax Act, 1961 and such modification shall however not affect other parts of the scheme. The definition in Section 2(1B) of the Income Tax Act, 1961 makes it clear that all the liabilities of the amalgamating company or companies immediately before the amalgamation becomes the property of the amalgamated company by virtue of the amalgamation. 38. Facts also do not indicate that the petitioner had questioned the jurisdiction of the respondent when the notice dated 31.03.2016 was issued in the name of transferor company Doosan international Private Limited. Therefore, the preliminary objection of the petitioner regarding the jurisdiction of the respondent to reopen the assessment stands overruled. 39. Coming to the merits of the case, it is evident that the merged/transferor company, namely Doosan International Private Limited, had entered into a Business Transfer (Slump Sale) Agreement dated 29.11.2008 with M/s.Ingersoll - Rand India Private Limited and purchased a Division of the said company as a going concern. 40. While filing the income tax return under Section 139 of the Income Tax Act, 1961, M/s.Doosan International Private Limited, the tran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion but also it is also questionable whether depreciation can be allowed towards Customer/Dealer and Vendor lists based on an internal allocation made by the said company. It is therefore for the petitioner to explain before the respondent that it was indeed entitled to claim depreciation on the Customer/Dealer and Vendor lists. 47. Therefore, I find no merits in quashing the impugned order in the light of the above reasonings. Therefore, the second respondent is directed to complete the re-assessment in accordance with law. It is however made clear that during re-assessment proceeding, the respondent shall confine to the issue relating to the claim of the petitioner for depreciation on the Customer/Dealer and Vendor lists alone which is sought to be questioned and denied in the re-assessment proceeding. 48. It is also made clear that the respondent shall pass appropriate order in accordance with law uninfluenced by the reasonings given in the impugned communication and the observations contained herein touching on the merits of the case of the petitioner. 49. It is for the petitioner to substantiate its claim for depreciation on the Customer/Dealer and Vendor lists with proper ..... X X X X Extracts X X X X X X X X Extracts X X X X
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